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Pension Resource

29 C.F.R. § 4022.7

Benefits payable in a lump sum.
eCFR amendment effective 2023-12-07 · current · last amended by 88 FR 44051, July 11, 2023
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Amended effective Dec 7, 2023 by 88 FR 44051, July 11, 2023. See what changed
(a) Alternative benefit. Except as provided in this part, PBGC pays benefits only in annuity form. If a benefit that is guaranteed under this part is payable in a lump sum or substantially so under the terms of the plan, including an option elected under the plan by the participant before plan trusteeship, PBGC will not guarantee the benefit in such form. Instead, PBGC will guarantee the alternative benefit, if any, in the plan which provides for the payment of equal periodic installments for the life of the recipient. If the plan does not provide such an annuity, PBGC will guarantee an actuarially equivalent life annuity.
(b) Payment by PBGC
(1) Payment in lump sum. Notwithstanding paragraph (a) of this section:
(i) In general. If the lump-sum value of a benefit (or of an estimated benefit) payable by PBGC and calculated as of the termination date does not exceed the dollar amount specified in section 203(e)(1) of ERISA in effect as of the termination date and the benefit is not yet in pay status as of the date PBGC becomes trustee, the benefit (or estimated benefit) may be paid in a lump sum.
(ii) Annuity option. If PBGC would otherwise make a lump-sum payment in accordance with paragraph (b)(1)(i) of this section and the monthly benefit (or the estimated monthly benefit) is equal to or greater than $25 (at normal retirement age and in the normal form for an unmarried participant), PBGC will provide the option to receive the benefit in the form of an annuity.
(iii) Deceased participants after plan termination. If the lump-sum value of a participant's benefit calculated as of the termination date does not exceed the dollar amount specified in section 203(e)(1) of ERISA in effect as of the termination date, and the participant dies after the plan's termination date and before the benefit is in pay status, PBGC will treat the benefit as owed to the participant at the time of death and the rules in subpart F of this part apply.
(iv) Payment of de minimis QPSA as lump sum or annuity. If the lump-sum value of a participant's benefit calculated as of the termination date exceeds the dollar amount specified in section 203(e)(1) of ERISA in effect as of the termination date, the lump-sum value of annuity payments under the qualified preretirement survivor annuity (or under an estimated qualified preretirement survivor annuity) does not exceed that amount, and the participant dies after the plan's termination date and before the benefit is in pay status, then the qualified preretirement survivor annuity (or the estimated qualified preretirement survivor annuity) may be paid in a lump sum, or as an annuity, if available, and if elected by the surviving spouse.
(v) Payments to estates. PBGC will pay any annuity payments payable to an estate in a lump sum without regard to the threshold in paragraph (b)(1)(i) of this section. PBGC will discount the annuity payments using the Federal mid-term rate (as determined by the Secretary of the Treasury pursuant to section 1274(d)(1)(C)(ii) of the Code) applicable for the month the participant died based on monthly compounding.
(2) Return of employee contributions
(i) In general. Notwithstanding any other provision of this part, PBGC will pay as a lump sum instead of as an annuity, the value of the portion of an individual's basic-type benefit derived from accumulated mandatory employee contributions, if payment in a lump sum is consistent with the plan's provisions and if the individual elects such payment either before or at the time the individual starts receiving annuity payments from PBGC for the remainder of the individual's benefit. For purposes of this part, the portion of an individual's basic-type benefit derived from accumulated mandatory employee contributions is determined under § 4044.12 of this chapter (priority category 2 benefits), and the value of that portion is computed under the applicable rules contained in part 4044, subpart B of this chapter.
(ii) Benefits in pay status. If an individual is in pay status with an annuity as of the date the plan becomes trusteed, and if the individual did not elect to withdraw any accumulated mandatory employee contributions, PBGC will not allow the individual to withdraw any portion of the benefit derived from accumulated mandatory employee contributions as a lump sum.
(c) Death benefits
(1) General. Notwithstanding paragraph (a) of this section, a benefit that would otherwise be guaranteed under the provisions of this subpart, except for the fact that it is payable solely in a lump sum (or substantially so) upon the death of a participant, shall be paid by the PBGC as an annuity that has the same value as the lump sum. The PBGC will in each case determine the amount and duration of the annuity based on all the facts and circumstances.
(2) Exception. Except in the case of accumulated mandatory employee contributions resulting from rollover amounts (as determined under § 4044.12(c)(4)(i) of this chapter), upon the death of a participant the PBGC may pay in a lump sum (or a series of installments) that portion of the participant's accumulated mandatory employee contributions that is payable under the plan in a lump sum (or a series of installments) upon the participant's death.
(d) Determination of lump sum amount. For purposes of paragraph (b)(1) of this section—
(1) Benefits disregarded. In determining whether the lump-sum value of a benefit does not exceed the dollar amount specified in section 203(e)(1) of ERISA, the PBGC may disregard the value of any benefits the plan or the PBGC previously paid in lump-sum form or the plan paid by purchasing an annuity contract, the value of any benefits returned under paragraph (b)(2) of this section, and the value of any benefits the PBGC has not yet determined under section 4022(c) of ERISA.
(2) Actuarial assumptions. PBGC will calculate the lump sum value of a benefit by valuing the monthly annuity benefits payable in the form determined under § 4044.51(a) of this chapter and commencing at the time determined under § 4044.51(b) of this chapter. The actuarial assumptions used will be those described in § 4044.52 of this chapter, except as follows:
(i) Loading for expenses. There will be no adjustment to reflect the loading for expenses.
(ii) Mortality assumption. The “applicable mortality table” specified in section 205(g)(3)(B)(i) of ERISA and section 417(e)(3)(B) of the Code for the year containing the termination date will apply.
(iii) Interest rate assumption. The “applicable interest rate” specified in section 205(g)(3)(B)(ii) of ERISA and section 417(e)(3)(C) of the Code for the month containing the termination date will apply.
(iv) Date for determining lump sum value. The date as of which a lump sum value is calculated is the termination date, except that in the case of a subsequent insufficiency it is the date described in section 4062(b)(1)(B) of ERISA.
(e) Private-sector lump sum rates. PBGC provides lump sum interest rates for private-sector payments in appendix C to this part.
Source credit, amendments & notes

[61 FR 34028, July 1, 1996, as amended at 63 FR 38306, July 16, 1998; 65 FR 14752, 14755, Mar. 17, 2000; 67 FR 16954, Apr. 8, 2002; 79 FR 70094, Nov. 25, 2014; 85 FR 55591, Sept. 9, 2020; 88 FR 44051, July 11, 2023]

29 C.F.R. § 4022.7 — Benefits payable in a lump sum. · eCFR amendment effective 2023-12-07 · https://pensionresource.website/EAMain?content=EAMain.Law&id=cfr29-4022.7 · printed Oct 16, 2026
On this page
  • (a) Alternative benefit.
  • (b) Payment by PBGC
  • (c) Death benefits
  • (d) Determination of lump sum amount.
  • (e) Private-sector lump sum rates.
Implements
ERISA § 4022 (29 U.S.C. § 1322) Single-employer plan benefits guaranteed
Cited by (code & regs)
Glossary
QPSA
Qualified preretirement survivor annuity.
Guidance addressing this section
PBGC
Final Rules
Proposed Rules
Also cited in 7 other documents
PBGC
Final Rules
  • 88 FR 76660 Nov 7, 2023 — Technical Amendments: Special Financial Assistance Withdrawal Liability Condition; SECURE 2.0 Act; and Other Updates
  • 79 FR 70090 Nov 25, 2014 — Title IV Treatment of Rollovers From Defined Contribution Plans to Defined Benefit Plans (b)(1)(i)(b)(2)
Proposed Rules
  • 76 FR 67105Proposed Oct 31, 2011 — Cash Balance Plans; Benefit Determinations and Plan Valuations for Statutory Hybrid Plans; Pension Protection Act of 2006 Comments due Dec 30, 2011 (b)(d)
  • 76 FR 13304Proposed Mar 11, 2011 — Benefits Payable in Terminated Single-Employer Plans; Limitations on Guaranteed Benefits Comments due May 10, 2011
IRS / Treasury
Treasury Decisions
  • T.D. 9601 Mar 4, 2013 — Final regulations under section 411(d)(6) of the Code provide guidance under the anti-cutback rules, which generally prohibit plan amendments eliminating or re…
Final Rules
  • 77 FR 66915 Nov 8, 2012 — Amendment of Prohibited Payment Option Under Single-Employer Defined Benefit Plan of Plan Sponsor in Bankruptcy
Proposed Rules
  • 77 FR 37349Proposed Jun 21, 2012 — Amendment of Prohibited Payment Option Under Single-Employer Defined Benefit Plan of Plan Sponsor in Bankruptcy Comments due Aug 20, 2012

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Each row is a version of the text as published by the official source. Code dates are the edition/release point that first reflected the change; regulation dates are eCFR effective dates. The library checks the official sources automatically, so new versions appear here on their own; “run” opens the sync that recorded a version.

EffectiveThroughSourceAmended by
Jul 1, 1997Jun 30, 1999CFR 1998 annual edition (revised as of 1998-07-01) run 127View
Jul 1, 1999Jun 30, 2000CFR 1999 annual edition (revised as of 1999-07-01) run 12763 FR 38306, July 16, 1998View · Redline (sign in)
Jul 1, 2000Jun 30, 2002CFR 2001 annual edition (revised as of 2001-07-01) run 12765 FR 14752View · Redline (sign in)
Jul 1, 2002Jun 30, 2006CFR 2005 annual edition (revised as of 2005-07-01) run 12767 FR 16954, Apr. 8, 2002View · Redline (sign in)
Jul 1, 2006Jun 30, 2015CFR 2014 annual edition (revised as of 2014-07-01) run 12767 FR 16954, Apr. 8, 2002View · Redline (sign in)
Jul 1, 2015Dec 31, 2016CFR 2016 annual edition (revised as of 2016-07-01) run 12779 FR 70094, Nov. 25, 2014View · Redline (sign in)
Jan 1, 2017Sep 8, 2020eCFR amendment effective 2017-01-01 run 779 FR 70094, Nov. 25, 2014View · Redline (sign in)
Sep 9, 2020Dec 31, 2020eCFR amendment effective 2020-09-09 run 779 FR 70094, Nov. 25, 2014View · Redline (sign in)
Jan 1, 2021Jul 10, 2023eCFR editorial change effective 2021-01-01 run 785 FR 55591, Sept. 9, 2020View · Redline (sign in)
Jul 11, 2023Aug 9, 2023eCFR amendment effective 2023-07-11 run 785 FR 55591, Sept. 9, 2020View · Redline (sign in)
Aug 10, 2023Nov 6, 2023eCFR amendment effective 2023-12-07 run 288 FR 44051, July 11, 2023View · Redline (sign in)
Nov 7, 2023Dec 6, 2023eCFR amendment effective 2023-11-07 run 788 FR 44051, July 11, 2023View · Redline (sign in)
Dec 7, 2023currenteCFR amendment effective 2023-12-07 run 788 FR 44051, July 11, 2023View · Redline (sign in)
Provision-level history (blame)